… OAG recovers Nu 43 million from a mining case after 11 years

Rinzin Wangchuk  

After reviewing investigations, the Office of the Attorney General (OAG) will charge a trader, Ugen Auto in Phuentsholing, for alleged Green Tax (GT) evasion worth Nu 10.5 million for 75 dumper trucks procured between 2018 and 2020. The company is also liable for fines and penalties amounting to Nu 75 million.

“We have almost completed the review for the investigation report referred by the Anti-Corruption Commission last year for prosecution,” an OAG official said.  “We will register the case in the court within a week.”

Import of dumper trucks designed for off-highway use are liable for 10 percent GT. Sales tax and customs duties are not applicable.

The ACC’s investigation revealed that Ugen Auto imported 49 dumper trucks in 2018-2019 and another 26 trucks in 2019-2020. However, the company had not paid the GT as required by the Customs Act.

Ugen Auto paid Nu 15 million for the evaded tax and dues when the ACC was investigating the alleged tax evasion.

As per Section 63 of the Customs Act of Bhutan 2017, import and export goods, whether dutiable or exempted, should be declared to the department at the customs station and customs area. As per the Customs Rules and Regulations of Bhutan 2017, a person shall declare goods to customs at the point of entry or exit.

The Customs Act states: “A person shall pay a fine of 50 percent the value of the goods evaded in addition to the amount of customs duty, if the person does not declare or wilfully misrepresents the value or number of import, export, or transit goods.”

It is reported that the growing boulder business in the bordering town since 2018 has led to a huge upsurge in import of dumper trucks.

According to the Bhutan Trade Statistics, Bhutan imported dumpers worth Nu 843.26 million in 2019, which is the ninth out of the top 10 imported commodities. In the same year, the country exported boulders worth Nu 4.97 billion (B), second in the 10 top exported commodities.

The highest import of off-highway use dumpers was recorded in 2018 with an import value worth Nu 1.91 billion. It was the fifth highest imported commodity. Boulders then were the second highest exported commodity and Bhutan exported boulders worth Nu 2.12B.

OAG officials, meanwhile, said that the OAG has recently instituted a committee and reviewed taxation laws, and is coming up with a standard prosecution for use in the courts. “There were many tax evasion cases filed at various levels of the courts but there was not even a single case that was uniformly interpreted by the courts,” an OAG official said.

ACC officials said that the investigations on similar tax evasion cases in Phuentsholing and Samdrupjongkhar are almost complete.

Ugen Auto officials were not available for comment.

Meanwhile, the  OAG recovered  Nu 33.589 million from the former mining head of geology and mines, Sangay Gyaltshen, yesterday in connection with the Samtse mining case after 11 years.

The Supreme Court’s ruling, which was passed on December 30, 2011, was not enforced until 2017 as the defendant was serving a prison term of seven years, according to officials from OAG’s enforcement division.

The SC ordered Sangay Gyeltshen to pay more than Nu 43.262M to the government for his involvement in the illegal mining activities, abuse of authority, conflict of interest, malfeasance, forgery and non-enforcement of environmental requirements in operating mines.

As a part of judgment enforcement, OAG began with recovering Nu 1.816M from shares and land owned by Sangay Gyeltshen, who also refunded Nu 7.5M in September last year.

However, the other defendant, Nagay, didn’t turn up to deposit the balance amount of Nu 42.160M to OAG yesterday. “Since he didn’t restitute the amount, OAG will pursue the case with the court for value-based sentencing as per Section 18 of the Penal Code,” an OAG official said.

Of the total Nu 47.844M, the then geology and mines area coordinator Nagay refunded more than Nu 5.685M to the government. He was found guilty of forgery, bribery, tampering with the public record, deceptive practice, money laundering, official misconduct, possession of assets disproportionate to his source of income, obstruction of lawful authority and unjust enrichment.  He also received seven years prison term.

The SC ordered both defendants to refund the amount to the government within six months, failing to do which would cause their prison terms to extend.